An off the wall idea for housing the homeless

Have been doing some more thinking about homelessness in LA and want to share an idea.

Let’s assume that LA accepts responsibility to house anyone within its borders who finds himself without a home.

In a perfect world, where the city had unlimited money and land, the simplest solution would be to build housing for these people in LA. The problem, of course, is that the city does not have unlimited money and land. Both are in incredibly short supply.

And that leads to the following cost asymmetry: Anyone who wants can come to LA for $49 or whatever a Greyhound bus ticket costs. But housing that person in a shelter costs the city probably $10k / year. And providing him with a permanent home costs on the order of $300-400k (the cost of a new unit of affordable housing).

Given the gigantic cost disparity, it’s impossible for the city to make real progress in reducing homelessness. People come here faster than the city can afford to add shelter / affordable housing beds.

So, the question becomes: How do you change the equation?

To answer that question, you have to understand why it costs to much to house people in LA: Because this is such a desirable city, and because we have such restrictive zoning, land for housing is incredibly expensive. Even in lower-cost neighborhood, the cost per dwelling unit of land is ~$40k.

What if we decided to house the homeless somewhere land was much less expensive? What if LA bought up land to the east, where its effectively free, and built shelters and / or supportive housing out there? The city could pay to build and maintain the housing and take advantage of whatever federal and state money and services are available (social security, Section 8, etc.) to off-set the costs.

Then, the offer to anyone without a home in LA would be pretty simple: We will fulfill our moral obligation to house you, so long as you are willing to be housed outside the city, where we have established a humane, orderly settlement for you at a manageable cost to us.

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Moses Kagan

Hi there. My name is Moses Kagan. Through my company Adaptive Realty you can gain access to local area knowledge and deals in real estate. If you're looking to buy, renovate, manage or sell apartment buildings in Southern California, you're in the right place.